Toronto

Microsoft is planning a new, $570 million Canadian headquarters in Toronto, GeekWire reported last week, becoming the latest in a series of major US tech companies to announce large-scale investments in Canada:

The Redmond, Wash., software giant announced plans to build a massive new Canadian headquarters in Toronto, promising to invest $570 million in the facility. Microsoft expects to move into the new facility, located at 81 Bay Street, in Sept. 2020. The company will relocate its current Canadian headquarters and several other offices, dispersed through the country, to the new headquarters.

Toronto is having a bit of a moment on the global tech stage. Google sister company Sidewalk Labs is developing a plan to create an innovation district on the Toronto waterfront as a proof-of-concept for technologists who believe they can improve urban planning. Google plans to relocate its Canadian headquarters to Toronto as part of that initiative.

The very next day, Uber also revealed plans for a new Toronto office, announcing that it would spend around $154 million to build a new engineering hub there, doubling its Toronto-based tech workforce to around 500 employees. The ride-sharing startup will also be expanding its self-driving car operations there. These latest moves will further boost Toronto’s profile as one of Canada’s leading tech hubs, particularly for emerging technologies like artificial intelligence. Major tech companies have been investing in Canada at a steady clip over the past year, also including Salesforce, Alphabet’s DeepMind unit, and Facebook. Toronto is also the only non-US finalist for Amazon’s second North American headquarters.

The city saw 28,900 tech jobs created, 14 percent more than in 2016, for a total of more than 241,000 workers, up 52 percent over the past five years, CBRE said. Downtown, tech accounted for more than a third of demand for office space.

Canada’s biggest city took fourth place in “tech talent,” a broad measure of competitiveness, pushing New York down a notch and coming in just after the Bay Area, Seattle and the U.S. capital. CBRE ranked 50 markets across North America, using measures such as talent supply, concentration, education and cost as well as outlooks for job and rent growth for both offices and apartments.

Ottawa is also on the rise, CBRE found, ranking that city highest in terms of growth potential based on its concentration of tech talent as a percentage of the total workforce. The Canadian capital city, situated in the urban corridor between Toronto and Montreal, is currently home to over 1,700 technology companies and more than 70,000 technology workers. Ottawa is home to some of Canada’s most prestigious universities and boasts among the highest living standards in the country, so it’s no surprise to see a tech scene take root there.

Toronto is the crown jewel of Canada’s growing tech sector and a centerpiece of Prime Minister Justin Trudeau’s ambitions to make the country a leader in emerging technologies like artificial intelligence. The city boasts a high-quality research university and a highly educated talent pool. Unfortunately, it’s also starting to experience the same problem faced by other major cities in North America: a shortage of housing, leading to high living costs for young professionals.

A survey by the business group last year shows 42 per cent of young professionals would consider leaving the region because of the high cost of housing. That has prompted the board to publish a Housing Policy Playbook in advance of the June provincial election with five recommendations for how the next government should tackle the housing crunch. The proposals range from building condos over transit stations to expediting construction permits. …

Salesforce will invest $2 billion in its Canadian business over the next five years, the company announced on Thursday, growing its office space, data center capacity, and Canadian workforce. The announcement came during a visit by Canadian Prime Minister Justin Trudeau to San Francisco, where he is meeting with tech company executives to encourage them to grow their businesses in Canada, Reuters reports. In particular, Trudeau hopes to woo these tech companies with Canada’s more business-friendly immigration policies at a time when President Donald Trump is cracking down on legal immigration to the United States:

Salesforce CEO Marc Benioff did not specify why the company chose Canada but he said, “Like you, we’re a city that values diversity, we value equality and we also value innovation. …We know we’ll be able to have a great business environment in Canada.” The company did not respond to a question about whether the immigration policies in the two countries influenced the decision.

Other American tech companies have bitten at Trudeau’s offer in the past year, Reuters adds, bolstering his efforts to make Canada (particularly Toronto) a hub for artificial intelligence and other cutting-edge technologies. Since last May, Uber, Alphabet’s DeepMind unit, Facebook, and Microsoft announced plans to establish or expand AI research labs in Canadian cities, including Toronto, Edmonton, and Montreal. Toronto is also on Amazon’s short list of contenders for its second headquarters in North America.

As the Trump administration continues to clamp down on opportunities for skilled foreign workers, their neighbors to the north have moved in the other direction. The Canadian government is actively opening its doors to international talent as the country is increasingly becoming a haven for tech innovation, and these efforts are beginning to bear fruit.

Canada has long been an easier option for immigrants if they are unable to get into the United States, but was widely considered the clear-cut second choice. The current US administration’s plans to tighten the borders, including review of the H1-B visa program and halting adoption of the International Entrepreneur Rule, along with its much more restrictive posture toward immigration in general, have started shifting that assumption.

In response to Canada’s pitch to foreign firms and talent, some startups from the US and other countries are beginning to migrate to Canada, and organizations like Toronto-based Extreme Venture are even reaching out to these companies to help them make the move, the Wall Street Journal reported last week:

One taker was fulfil.io, a cloud-based software platform that aids companies in their supply-chain operations. Two of the company’s founders decided to come to Canada in May from their native India after they had to leave the U.S. when their H1-B visas expired and renewal proved difficult. They closed their first sales deal a month later. “Canada looks like the right place to grow,” said one, Sharoon Thomas, fulfil.io CEO. “I’m just surprised that we didn’t think of it first.”

For workers, the pull of a Facebook or Google paycheck and the Silicon Valley locale is still hard to beat, but Canadian government officials, tech leaders, and venture capitalists are making a concerted effort to court American tech talent.